New owners, city locked in dispute over former bar

More than 30 of Ameena Samatar's friends and family members crowded a hearing room last week at the Minnesota Judicial Center on Cedar Street, eager to show their support for her dreams of turning a shuttered bar into a Somali meeting hall.

Most of the attendees were women dressed in traditional Muslim headscarves, or hijab, and their hunt for seats in the tightly packed courtroom sent court workers into the halls to round up more chairs. A single attorney represented the opposition: the city of St. Paul.

A notorious Frogtown watering hole built in 1890 is at the center of a legal dispute between a Minneapolis couple who purchased the vacant property two years ago and the St. Paul City Council, which wants it torn down.

Samatar and her husband, Alex Jerome, maintain the city council and the city's legislative hearing officer, Marcia Moermond, rushed to have the former Moonlight Magic bar at 601 N. Western Ave. ordered demolished shortly after the couple bought it from a bank in July 2012.

The city's December 2012 demolition orders for the two-story wood-frame building are on hold while the family's legal appeal moves forward. Also on hold are the couple's plans for a meeting hall and wedding center on the second floor, above a retail space such as a dollar store, small grocery or restaurant.

City officials say Samatar and Jerome failed to provide adequate work plans or show evidence they could afford to bring the site up to the standards laid out in the city's building code.

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"The building needs significant repairs," said Virginia Palmer, an assistant city attorney, during the Minnesota Court of Appeals hearing Wednesday.

The 11,700-square-foot building had previously housed Lucy's Saloon and later Moonlight Magic, a magnet for resident complaints and police calls. A customer was beaten to death outside the bar in 2009, and a month later, a security guard exchanged gunfire with men driving by in a van.

The building, nestled in a residential neighborhood, sits across from an elementary school.

Moonlight Magic closed in 2010 after the city revoked its liquor license and determined that no alcohol could be served there for 15 years. The more sedate Wilebski's Blues Saloon operated for a short time on the building's second floor, but the two bars shared a single liquor license and the blues saloon was also forced to close.

On Wednesday, attorneys for Samatar and Jerome told a three-judge panel from the Minnesota Court of Appeals that the city council's Dec. 19, 2012, demolition order was "arbitrary and capricious." They also said it constituted an illegal taking of private property.

In legal filings and oral arguments, attorneys Larry Leventhal and Elizabeth Royal maintained that the family made good faith efforts to comply with demands that they hire a project manager and produce structural and architectural reports outlining the necessary renovation work.

An inspection report by Mark Balay Architects and a separate engineering report from Herzog Engineering LLC called the bar's brick walls and stone foundation structurally sound, as did Amy Spong, the city's historical preservation specialist.

The couple said the city nevertheless demanded they produce evidence they could afford the repairs and repeatedly increased the amount of cash they were required to have on hand. The requirement grew from $100,000 to more than $200,000 within a matter of weeks, despite claims from the couple's project manager that the building was structurally sound and could be patched up for far less.

Then-city council member Melvin Carter expressed concern during a Dec. 5, 2012, hearing after Jerome told them he was fixing the building in stages and waiting to find a tenant before finishing repairs. "If somebody signs a lease tomorrow, I'll spend the money to fix it up," said Jerome, according to the city's legal brief.

City officials pointed to eight pages of building, fire and safety-code violations, from rodent infestation to mold. They said an outdoor stair needed to be removed and replaced with an enclosed stairway, and boilers, water heaters, bathrooms and a sprinkler system all needed to be replaced.

City officials have said their repair cost estimates were based on valid inspections. "I would dispute there was anything in the record to ... indicate (Moermond) would increase the amount," Palmer told the judicial panel.

Palmer said the couple failed to provide the city with "bids grounded in reality" to repair a leaking roof and replace plumbing and heating, ventilation and air conditioning systems.

Nevertheless, the roof was fixed for $18,000, according to Leventhal, which was well below a competing bid that city officials favored for $42,000.

In legal filings, Samatar said she was able to provide Moermond with bank account statements showing $50,000 in cash on hand as early as August 2012. During a Nov. 27, 2012, hearing, Samatar said she showed Moermond she had access to more than $150,000 to complete repairs, including $32,800 in cash in an account, $75,000 in another and a $50,000 line of credit.

At the time, Moermond expressed concern about the fluctuating amount of money in the larger account. According to the filing, Moermond "states that she was confident that the $75,000 account was not stable, as it would appear that it had diminished from $100,000." She asked for an affidavit indicating that the money would be dedicated toward the building's restoration.

Also complicating the legal fight is the status of a neighboring parking lot that Moonlight Magic had delegated for customer parking. The lot -- which was once attached to a now-demolished house -- is zoned for residential parking only.

Samatar said city officials told her that getting the zoning changed to commercial parking could take four to six months. She said she discovered on Sept. 25, 2012, that the city would not issue her electrical permits and other necessary work permits to complete the building repairs until the zoning for the parking lot was altered.

At that point, said Leventhal, she was stuck in a Catch-22, unable to make required repairs until the parking lot issue was addressed, and unable to address the parking lot issue because the building was ordered demolished for failure to make required repairs.

"They couldn't pull permits without getting the zoning," Royal said.

Samatar's attorneys said she was unable to draw up a formal business plan without knowing the amount of parking that would be available to her customers. Different uses, such as a restaurant or retail shop, have different parking requirements under city code.